S&P lowers Empresas

Standard & Poor's said it lowered the ratings on Empresas CMPC SA to BBB from BBB+.

The outlook remains negative.

The downgrade reflects an opinion that CMPC's financial risk profile will remain somewhat leveraged through 2015 as the company continues investing in capacity expansion, resulting in negative free operating cash flow in the next few years, S&P said.

The agency said it believes CMPC's decision to go ahead with the expansion of its Guaiba operations in the Brazilian state of Rio Grande Do Sul would result in negligible free cash flow generation to reduce currently high debt.

Despite the decision to finance up to 45% of the project cost with its own resources, the base case shows little room for improvement in current leverage patterns, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.